EPF Adopts UN-Supported Principles For Responsible Investment
KUALA LUMPUR, 8 April 2019: The Employees Provident Fund (EPF) today announced it has signed the United Nations-supported Principles for Responsible Investment (UN supported PRI), underlining its commitment towards responsible investing and Environment, Social and Governance (ESG) best practices while acting in the best long-term interests of its members.
EPF Chief Executive Officer Tunku Alizakri Alias said, “As the EPF progresses towards becoming a trillion ringgit fund, we recognise that aligning our investment activities with the broader interests of society would bode well with our objectives as a retirement savings fund driven by long-term, sustainable value creation for our stakeholders.
“We believe that the upholding of ESG best practices can affect the performance of investment portfolios to varying degrees across companies, sectors and regions. By signing the UN-supported PRI, we formally underline our commitment to the six Principles for Responsible Investment, and we hope to meaningfully incorporate ESG factors into our investment due diligence and decision-making process, given its potential to enhance return while reinforcing our existing risk management framework.”
The EPF has traditionally been a socially-conscious investor in excluding companies that are seen as unethical such as alcohol, tobacco, gambling, weaponry and nuclear power. Today’s announcement will see the EPF reinforcing its commitment towards ESG and sustainable investing principles, laying the foundations for stronger environmentally-friendly and socially conscious practice, on top of sound corporate governance among its investee companies.
Tunku Alizakri said this would improve EPF’s ability to balance financial returns with measurable impact towards society and the environment for the benefit of future generations. “While financial considerations remain paramount, we need to account for the larger ramifications of our activities on society, emphasising what is good and right while minimising the negatives.”
The UN supported PRI is acknowledged as the world’s leading proponent of responsible investment with more than 2,000 signatories representing more than US$70 trillion (RM288 trillion). The initiative aims to understand the investment implications of ESG factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions.
Signatories are required to implement the six Principles for Responsible Investment, which include embedding ESG considerations into investment analysis and decision-making processes, as well as seeking appropriate ESG disclosures from investee companies.
About the Employees Provident Fund (EPF)
The Employees Provident Fund (EPF) is Malaysia’s premier retirement savings fund to help its members achieve adequate savings for a comfortable retirement. This is in line with EPF’s vision to help members achieve a better future and the mission to safeguard members’ savings and deliver excellent services. The EPF has evolved significantly from transaction-centric to a professional fund management organisation with a strong focus on retirement security. The EPF is guided by a robust and professional governance framework when making investment decisions. It continues to play a catalytic role in the nation’s economic growth and seeks to cultivate a savings and investment culture among its members to improve the country’s financial literacy level.